New report finds workers are either extending or accelerating retirement plans due to AI
The rise of artificial intelligence (AI) in workplaces is adding another layer of uncertainty to Hong Kong workers' retirement plans, according to a new report.
Findings from T. Rowe Price, a global asset management firm, revealed that employees are seeing a mix of opportunity and disruption for their retirement plans because of AI adoption.
Nearly three in four (72%) employees are already using or would consider using AI to work more efficiently so they can extend their careers.
In fact, 81% of employees said they have started or would consider investing time or money in developing skills that may become more valuable in the age of AI, with 73% already using the technology to work independently through freelance, consulting, or project-based work.
However, 60% of workers said they have already started or would consider using AI to reduce their working hours or move towards retirement earlier than expected.
In fact, 58% said they are now using AI to start a business or side business.
"Retirement is becoming less of a single point in time and more of a journey. AI adds another layer of uncertainty because it could enable some people to work longer or more flexibly, while prompting others to reskill, reduce their hours, or rethink when they retire," said Raymond Chan, Head of Greater China Intermediary Distribution at T. Rowe Price, in a statement.
The issue with retirement uncertainty
Despite these moves, the report found that employees lack proper financial preparation for their plans.
Only 35% of employees reported that they have prepared financially for extending their careers, while just 27% are prepared to reduce working hours or move towards retirement earlier.
Nearly 60% of the respondents believe that they will need more than HK$5 million in savings and investments to retire with peace of mind, including 22% who believe they will need more than HK$10 million.
But 44% believe that they might need more money for retirement because of the potential impact of AI.
"Our survey suggests the question is no longer simply how much people need to retire, but whether their financial plans can adapt to different ways of getting there," Chan said.
"As working lives become more varied, financial flexibility becomes increasingly important as career length, income, and retirement paths change."
Flexible retirement arrangements needed
Building emergency savings is the top financial response of employees when it comes to AI disruption, according to the report.
Some 43% of the respondents said they have an emergency savings buffer, while 28% said they have reviewed or changed their retirement investment mix.
But 63% of employees believe that the growing use of AI in the workplace raises the need for flexible retirement plans.
Wenting Shen, Global Investment Solutions Strategist and Portfolio Manager at T. Rowe Price, also underscored the importance of having an investment framework that can adapt over time to inflation amid long-term retirement.
"A retirement glide path is one such framework, gradually adjusting the balance between growth and more defensive assets as an investor moves toward and through retirement," Shen said.
"This disciplined approach to asset allocation can help balance long-term growth, retirement income objectives and changing risk capacity, while providing flexibility as the retirement journey evolves."
